BDO agrees to pay $50 million to settle tax shelter investigation

Chicago-based accounting firm BDO USA admitted to criminal wrongdoing and agreed to pay $50 million on Wednesday to settle a long-running investigation into fraudulent tax shelters.

In an agreement with the U.S. attorney's office in Manhattan, BDO will avoid prosecution for designing and marketing financial transactions that created at least $6.5 billion in phony tax losses.

The arrangements, which took place between 1997 and 2003, helped wealthy Americans evade about $1.3 billion in taxes.

"Today's agreement is the latest successful result in a multi-year effort to unravel this massive fraud and hold to account those individuals and entities responsible for depriving the IRS of billions of dollars in revenue," Manhattan U.S. Attorney Preet Bhara said in a statement. "Tax cheats, bethey individuals who file false returns or businesses that help them carry out their deception, will not be tolerated."

BDO said in a statement that it is pleased these matters have been brought to a resolution.